Potential Settlement with FEMA in the Works to Preserve Flood Insurance in Florida

The Federal Emergency Management Agency (FEMA) has warned Florida Gov. Rick Scott that if he signs a bill on his desk, localities in the state could lose flood insurance coverage under the National Flood Insurance Program (NFIP)

April 17, 2012

The Federal Emergency Management Agency (FEMA) has warned Florida Gov. Rick Scott that if he signs a bill on his desk, localities in the state could lose flood insurance coverage under the National Flood Insurance Program (NFIP). Currently, Florida has more than two million policies with almost $500 billion in coverage that could be at risk. In addition, a suspension in NFIP flood coverage could stall new home financing, because lenders usually require flood insurance in designated flood zones.

The measure before the Governor is House Bill 503, which among other things allows local governments to issue building permits without getting permits from any other state or federal agency, such as FEMA. This bill was backed by businesses who claimed the permitting process involved too many agencies and too much time. They believe this bill will change that.

FEMA Regional Administrator Major May outlined the agency’s concerns in a May 30 letter to Gov. Scott. FEMA is concerned that leaving other agencies like FEMA out of the loop would give it no say over development in flood prone areas, a violation of National Flood Insurance Program rules. “One consequence is that flood insurance may not be sold or renewed within the community,” May wrote in his letter to Scott. “We want to ensure that Florida citizens continue to receive the benefits of the [National Flood Insurance Program].”

On Thursday, May 12, FEMA signaled a potential resolution, issuing a two-sentence statement saying that the willingness of the Florida Division of Emergency Management to issue a memo advising communities to include a condition for all permits in flood hazard areas would resolve the conflict created by House Bill 503, “as long as this course of action can be effectively enforced.” PIA of Florida was active in helping to bring about this compromise.

“This is a prime example of the kind of unintended consequences that can result when well-intentioned legislation is not thought through,” said David Eppstein, assistant vice president of regulatory affairs of PIA National. “Simplifying the permitting process is a laudable goal, but it cannot be accomplished by telling local governments they can simply ignore federal and state requirements at their whim. If a proper mechanism can be put in place that fixes the flaws in this legislation, it will represent a constructive compromise that averts disruption in the availability of flood insurance.”